HDS shrinkwraps its data centre engine

Hitachi Data Systems New Zealand has "shrink-wrapped" its data centre technology to sell to other hosting companies.

Among those Hitachi is talking to is Gary Connolly, who is driving a project to build five secure data centres in New Zealand for use by offshore companies. Connolly, of consultancy Digital Agenda, says a UK company and two from the US are interested in hosting data in New Zealand and have offered to fund a pilot that is due to start at the end of December. Having seen Hitachi's virtual data centre (VDC) running, Connolly says he is considering it as a possible platform for the pilot.

Hitachi New Zealand manager Roger Cockayne describes the VDC as a data centre engine which can be used to host solutions for "tier one" and "tier two" companies (annual revenue of $30 million to $1 billion).

Originally a hardware vendor, Hitachi NZ went into outsourcing in 1999 using a small mainframe. It decided to develop a cheaper platform using Unix and Windows technology to make hosting to tier one and two companies more cost-effective. It has spent about $6 million developing VDC and has earned $13 million worth of business from it, says Cockayne.

"The business driver behind it was that with a small mainframe you could charge $4 million per year and make $1 million. With the VDC you charge $2 million but you make $600,000. It's much more cost-effective." Cockayne says the cost is also lower for customers, with some paying as little as $500 per month.

Of Hitachi New Zealand's 45 staff, 25 work on the VDC, which services six customers including Tower Insurance and application service providers Always There and Torque.

"The main push this year has been to shrink-wrap it to a point where we could export it. Not necessarily overseas but to anyone who would want to host on such a platform," says Cockayne.

The local operation has agreements with Hitachi Australia and Singapore, which will use the VDC under licence to New Zealand.

Cockayne says the local operation has been able to develop the VDC because it is small and focused. "The bigger the organistaion the more encumbered you are when ever you try and do something different. With us the culture is just right for this type of work. All our parents said to us was, you keep on making a profit and we'll leave you alone."

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